Egypt's Orascom Telecom yesterday said it received an offer from the Egyptian Company for Mobile Services (Mobinil) to buy 100 per cent of two of its technology companies LinkdotNet and Link Egypt.
"The sale of LINKdotNet to ECMS represents another key step in the implementation of our stated strategy to dispose of our non-core assets and focus on our GSM businesses," Naguib Sawiris, chairman and CEO of Orascom Telecom, said.
The offer was approved by Mobinil's board of directors on February 20 and the transaction will be subject to a standard due diligence process. The valuation will be finalised at the end of the due-diligence process and will be subject to OTH Board approval, the statement said.
"LINKdotNet has represented a valuable asset for our telecommunications business but we believe it can achieve its full growth potential by being managed within one of our operating subsidiaries," Sawiris said.
Orascom did not say how much Mobinil had offered to pay for the two companies. LINKdotNET sells internet services in the Middle East and Link Egypt sells offshore software development services, according to its website.
The sale would allow Orascom, whose shares have lost more than a-third of their value this year, to raise cash, said Shrouk Diab, telecom analyst at Cairo-based investment bank Beltone Financial. "They are trying to cut capex (capital expenditure) across the board... in response to global economic conditions," she said.
Buying the two companies would allow Mobinil to boost its data offering to better compete with the Egyptian subsidiary of UAE-based etisalat, she said.
In November, Orascom said it had agreed the sale of service firm OrasInvest to sovereign wealth fund Abu Dhabi Investment for $180 million (Dh661m) .
France Telecom owns 71.25 per cent and OTH owns 28.75 per cent of Mobinil Telecom, which in turn holds a 51 per cent stake in Mobinil.
Another 20 per cent is directly owned by Orascom Telecom, while 29 per cent is in free-float.